Habit

Wednesday, 14 October 2015

Medium term notes are used to raise working capital and to
improve a company’s balance sheet. Private trading programs are quite popular
and banking instruments are popular trading tools. Private trading programs are
an investment generating option for individuals and corporates alike, though
not many have adequate funds to gain entry into such programs. On the other
hand, MTNs could be acquired for larger values at discount and then used in
private placement programs, says Matthew Roddan of Project Ninety Nine.

Why are MTNs in demand for PPP or Private Placement Programs
as they’re called? MTNs have been around since late nineties, with amounts as
less as $10 – a billion, with the current highest values crossing $75 billions!
There are more than 6500 private trade programs and even big corporations like
Harley Davidson, Sony Capital and LG have offered MTNs collateralizing their
assets for development or expansion.

Individual investors, hedge funds and portfolio managers
prefer private trading programs and play by the rules, where most of their
funds are invested in one or more variants of private trading programs, says Matthew
Roddan of Project Ninety Nine. However not many individuals have large sums
and many investors are lured by middlemen who take advantage of their ignorance
and exploit them into giving up their funds for nothing using fraud or scams.
On the other hand, there are real platforms like Project Ninety Nine where
investors can pool their funds and get placed in a genuine private placement
program and earn profits, which is otherwise impossible when done individually.

MTNs come in handy as they can be purchased for a discount,
so one can get an instrument worth 100 million for 10 million or less. Then, it
could be invested in PPPs for the duration (medium term) the instrument is
valid (1 – 99 years). As for firms, PPPs
are a way to improve their financial credentials and raise capital. Without
MTNs many wouldn’t have a shot at these programs, owing to the high investment
required. MTNs are a way to invest in PPPs, though not many know how they work.

It is important to understand that MTN buyers do have rights
and should request for POF before buying the instrument. If a potential seller
refuses or show POF (Proof of Funds), stay clear from them. Remember MT103/23,
MT799/999, MT760, etc. are a type of POFs and there’s no way they can avoid
showing the POF.

Do you know as a buyer you have a right to see CUSIP / ISIN
of the instrument you are buying?

In most cases, you are talking to a broker or middleman who
claims to be a seller’s mandate, but you must understand there could be more
than just this person and it could be a long chain before the direct seller or
buyer is connected. Always ask how many people are involved before proceeding.

No trading platforms communicate with the end party before
requirements are met and anyone claiming otherwise is not to be trusted.

While PPPs or Private Trading Programs or Private Placement
Programs are real, it is important to identify the right contacts and resources
to get through and make money through these programs. Of you wish to avoid
fraud and scams tread carefully.

Tuesday, 13 October 2015

. Do you know stock market
speculations are based on DCF? Whether it is acqui When a company’s financials
are scrutinized, metrics used to evaluate the same are important. According to
Wall Street, a company’s cash flow is the best indicator for a company’s
performance. As such, DCF or discounted cash flow analysis is used to determine
a company’s worth by estimating future cash flows.

Projected cash flows (operating
profit + depreciation + amortization of goodwill - capital expenses - cash
taxes - alteration in working capital) are discounted to current value using
company’s weighted average costs. In short, DCF is an effective and
unparalleled tool for determining share value, which is important for
investors.

Also, a few financial scandals only
hiked the importance of DCF. With more concerns about reliability of earnings
and calculation of P/E or cash flow determination, coming up with a DCF model
calls for more efforts than merely dividing share price by income or sales.
However, taking this effort ensures investors get a good idea of the key
factors like share value, projection of future income or profits, growth ratio,
etc. Besides, DCF can’t be manipulated through aggressive accounting practices
easily.

While DCF is a very useful tool, it
isn’t without shortcomings. It is a mechanical valuation tool that works akin
to garbage in, garbage out saying. So, any minor change or change in
assumptions could lead to major differences. But, investors should always
crosscheck evaluations and allow considerable margin for such changes or
errors, when taking decisions. Major investment decisions should not be taken
purely relying on DCF calculations alone. What if a client backs off from a
contract, or what if interest rates hike unexpectedly or even a competitor
cropping up with crushing prices and the firm losing most business? Remember,
when expectations change, calculations or derivations based on the assumptions
will change along with it! Do you know even reputed investor Warren Buffet and
other financial experts and portfolio managers rely on DCF?

Discounting cash flow is tricky and
it is important to remember that assuming or predicting future estimates could
be meaningful or meaningless depending on the estimates taken and how
reasonable they are. Besides, numbers aren’t static and keep changing with
changing trends. As for investors, evaluating stock pricing is very important
and DCF is a handy aid for calculating the same, says Matthew Roddan of Project Ninety Ninering a
business, or a property, or investing on stock, DCF helps with speculating
approximately.

Saturday, 10 October 2015

We’ve all heard the saying “Money can’t buy happiness”
several times. Funny how most of our problems are related to money or created
by money! Can we really ignore money? Money is a means of exchange and a very
essential commodity. Without money there’s nothing one can do today – home,
education, food, medical assistance and what not, everything boils down to
money.

Right from the time a life is brought into the earth,
everything revolves around money. While money is not everything, is does play a
key role in our lives and one can never do without it. That aside, what about
businesses? Can businesses be commenced or run without money? There’s always a
pursuit for money and there’s no denying the fact that enough money can bring
one a secured feeling. That’s one reason why many prefer starting their own
business, says Matthew Roddan of Project Ninety Nine.

With tumbling economy, many lost their jobs and were left in
lurch and succumbed to not being able to manage the change or uncertainty. Even
established individuals who had a career for years couldn’t take the hit and
look for new opportunities, if at all there were any! By having a business, one
can control their destiny and not leave it at the mercy of others – this is one
reason that pushes many to start their own business.

It is one reason why many who don’t have the resources for
starting a business, look for potential investors or crowd funding to start
their dream and take reigns of their future. When potential entrepreneurs have
profitable proposals, investors or sponsors are interested in taking the
plunge, provided they’re briefed on the possibilities adequately. Matthew Roddanof Project Ninety Nine says that’s
one reason why project proposals should be prepared along with financials and
statistics to show potential investors. Being prepared is the key to getting
funding and Project Ninety Nine brings potential entrepreneurs and investors to
discuss on options and take up profitable and potential ventures.

Unlike other sites, this is a real platform where investors
discuss and share knowledge and projects that catch their attention are given a
thought, analyzed and the site intervenes to come up with a mutually beneficial
proposal. In other words, the site stays though the ride and ensures both
parties’ interests are taken care of. Handling finances the right way ensures
one gets to live comfortably, secure one’s future and what not. Money is a
means to an end – one’s security, which influences one’s happiness, freedom and
quality of life.

Monday, 5 October 2015

DCF short for discounted cash flow analysis is a way to
evaluate a company, project or assets. Cash flows for the future are assumed
and discounted considering cost of capital to get the current values. Sum of
future cash flows outgoing or incoming is net present value (NPV) that’s taken
as price or value of cash flows. Discounted cash flow analysis is used to
determine the worth of an investment in simplified terms. It is used in real
estate development, investment finance, patent evaluation and corporate
financial management.

As Matthew Roddan
from Project Ninety Nine says,
understanding the probability of risk and profits is very important in an
investment decision. Investment decisions are made for profits and
understanding what one can expect is very important to determine the
suitability of an investment. Exponential discounting is the most common method
deployed for discounting, to evaluate future cash flows answering the question
– what would be the returns for an investment at a specific rate of return, as
against cash flow expected in the future? Hyperbolic discounting is another
method, though not deployed widely. Discount rate is the right weighted average
cost of capital (WACC) and it reflects cash flow risks.

Discounted cash flow analysis is important for any investor
to determine if or not an investment decision is suitable. Let’s look at it
this way – consider the investment as a business or a company. DCF is a way to
determine a company worth currently, based on calculations for the future.
Though this is a useful method, it does have hiccups. Being a mechanical
evaluation tool, it is bond by a principle and even simple changes in one value
could result in major changes in value. So, instead of determining values for infinity
a cap is used – say 10 years. This way, estimation becomes measurable.

Besides, Discounted Cash Flow is a method that uses
intrinsic valuation for companies that have predictable flow of cash. It is
used for companies that have been around for a while, though it is also used
for IT companies that are expected to grow swiftly. This means, when a start-up
or developing firm is evaluated, the results could go right or horribly wrong!
As an investor, you must be able to weigh your options and prepare for both,
says Matthew Roddan of Project Ninety Nine. This way or that,
evaluating an investment is important for any investor and determining the
right investments is done based on calculations that are probabilities and possibilities,
not a definitive. The calculated risk should be something you would be able to
manage, irrespective of whether it turns our favorable or not!

Saturday, 3 October 2015

The Dubai International Financial Centre also called DIFC is
located in Emirate of Dubai and is a federal financial free zone in United Arab
Emirates. Established in 2004 through a decree, DIFC is a sprawling 110 acres. Legal
systems and courts are different from UAE, with a jurisdiction over commercial,
corporate, employment, trusts, civil and securities law affairs. The main aim
of DIFC is to offer a platform for financial and business institutions to enter
in or out of emerging marks in the region and to create an ambiance for
progress, growth and economic development in UAE by offering adequate
infrastructure and legal backing on par with international standards.

Under the constitution of UAE, DIFC is independent
judicially with commercial and civil laws different from that of UAE. DIFC laws
are in English to avoid ambiguity and DIFC has courts and judges from
jurisdictions with common law like Singapore, England and Hong Kong. Though
DIFC has independent laws, the immigration rules and criminal law is the same
as UAE. DIFC-LCIA Arbitration Centre is modeled after London Court of
International Arbitration. DIFC Authority is the main governing body for DIFC
and DFSA (Dubai Financial Services Authority) regulate financial services in
DIFC, though it is different from UAE federal Securities and Commodities
Authority that governs outside of DIFC.

Financial institutions can submit applications for a license
and they’re benefitted from the 0% tax for income and profits, no limitations
on Forex or profit/capital repatriation, 100% foreign ownership, business
continuity and operational support amenities. Dubai International Financial
Exchange is a privately owned financial exchange for DIFC and was listed as
DIFX and rebranded as NASDAQ Dubai in 2008. DFSA regulates NASDAQ Dubai.

Dubai International Financial Centre Complex houses a hotel,
Ritz Carlton that was opened in 2011. Dubai International Financial Centre also
houses art galleries, restaurants and an array of outlets for shopping
extravaganza. The Dubai shopping season has garnered acclaim worldwide and the
number of tourists visiting during this season shoots through the sky. Many
entrepreneurs would like to have a business established in DIFC and it isn’t
surprising considering the perks and profits businesses get here. Matthew Roddan of Project Ninety Nine would recommend
suitable and innovative project launch here, when an able leader is helming it.

The location of a business is very important and DIFC is one
location businesses should consider. Not just for expansions, even new launches
that are good would sure thrive and flourish here. There’s a reason why it is
called Financial Centre and you must try it, to believe it.

Friday, 2 October 2015

Medium-term note or MTN is when a debt note maturity period
is 5 – 10 years, though technically the repayment duration or maturity period
could be less than a year to a 100 years! These debt notes can be issued on
floating or fixed coupon basis. Floating rate MTNs are either simple where the
coupon is aligned

Euribor +/- basis points or it could be notes with complex
structure and linked to indices, swap treasuries, etc. If they’re issued to investors who aren’t
residents of the US, they’re termed "Euro Medium Term Notes". Issuing
MTNs to US-based investors calls for a US MTN program.

MTNs can come with fixed maturity date or come with put
options, embedded call wherein MTNs could be redeemed per pre-accepted terms or
speculations. MTN is usually issued for unsecured investment debts, with fixed
rates, though it offers flexibility to both the issuer and investor when it
comes to documentation and structure. While many use bank instruments for PPP
and have an idea of how MTNs work, many don’t know how it really works! It is
funny how they’re rising in popularity and many deploy it for different
purposes, without knowing how these instruments work or what it really is! Matthew Roddan of Project Ninety Nine explains MTNs are
a great way to get into PPP, especially since not many have the funds required
to invest in PPP from their resources. Since PPP is gaining exposure and many
would like to know if or not PPPs are what stuffs that make a mythical legend,
let’s understand MTNs better.

According to Matthew
Roddan, many aspire to invest in PPP but end up being unable to do so by trusting
wrong people (brokers) or because they don’t have enough resources. The former
is truer and why many think PPPs don’t exist. So, let’s understand MTNs better
and how they can be used for PPP. MTNs are instruments of debt issued by banks
and are sold to investors with a good face value, annual interest rate and
maturity date. So, if you hold a note from Bank of America that’s worth 100
million, with interest rate of 7% each year, you will get 7 million till the
instrument matures, after which you can cash it for its worth!

While MTNs are very similar to debt notes, it is more
popular because of its price, flexibility, resale potential and option to be
bought at a discount instead of its face value. According to Matthew Roddan from Project Ninety Nine, MTNs are
available for more than fifty years and can effectively compete with any bank
instrument. Since they were available for discounted rate, it became popular
after “trading bank instruments” gained notoriety in the secondary market. PPP reign
began soon after and Internet has made it even more popular and widely
available. If you have an interest in PPP, MTNs Project Ninety Nine are your go-to
option.

Wednesday, 16 September 2015

Matthew Roddan is the
founder of Project 99 an
innovative and new approach to project funding, providing funding solutions to
projects throughout the world.

Matthew now offers only distinct consultancy services on a
referral only basis. This work includes four major elements starting with
forming private equity and similar entities; working on transactions for such
funds; working on a wide array of cross-border joint ventures involving
emerging markets and ending with working on various infrastructure projects in
emerging markets which includes a wide range of credit & capital raise real
estate based projects.

His works as a representative includes setting up a
collective investment scheme investing in offline agreements for the purchase
of gold in Africa, Central and Eastern Europe, southeastern Europe and African
areas.

He has also represented many private companies in making
various investments in developments that include financing and restructuring of
investments, establishing joint ventures connected to construction, real
estate, financial and franchise projects in Africa, central & South
America, South Asia and the Middle East regions.

Dealing with high net worth individuals in debt finance
programs and advising on their risk or reward structure is another area of work
as a representative.

Matthews work with Project99 involves the establishment of
banking facilities for clients in jurisdictions such as Singapore, Dubai and
Liechtenstein. Clients funds remain under their control at all times whilst
also being able to leverage the funds for use in managed buy sell programs. The
nature of the funding mechanisms offered require specialist knowledge and understanding
of the the sale and purchase of bank debt.